Ways I took to repay my debts

Some documents about my debts

This is my budget sheet. | Source

A letter from One of my creditors. | Source

My debt files | Source

How I got into debt

At first, I was very good with my money as I don't really have much money to count. But then, I started working and all of a sudden I got some money. Money does not really turn me on but I know that having money means, I will have food to eat, clothes, shoes and money to pay my bills which keep a roof above my head and money for holidays as well. I am quite happy to just have enough money but then my troubles started when I started borrowing money to pay for things instead of saving to pay for them. That is when everything went wrong for me. It went out of control.

Then credit cards deals arrived and I thought maybe it is good to have one of them. Everyone seems to be using them fine. My friend and my husband warned me at the time not to have them, but what did I do, I was tempted by the offers of the banks and got one to start off with. I thought to myself, it would be okay to have one for emergency purposes. But one became two then became three until I accumulated 7 credit cards and a couple of bank loans. I was managing alright, until one day I became ill, then my hell began. I got behind with my repayments and my creditors started ringing me several times a day. They started sending me threatening letters that if I don't send them a payment, they will take me to court. You can imagine my fright when I have to face all of them in court. I became a nervous wreck . I refuse to answer the phone, in case it is them. I was having sleepless nights thinking of ways to solve my problem. I did not know who to turn to. I don't even want my husband to know about it. My husband was ill at the time for 8 months.

All my creditors started to add charges for late payments and over limit fees, making my debts even more unmanageable. But they have a right to do that, so I thought. I owe them money, so I should repay them but I could not afford to pay all of them in one go. I could only pay what I could manage. Then I became ill and left my job which made it even worse as by then my debts are accumulating with more interest and late payment charges. I became stressed out.

Looking back, all the stress of being ill, being jobless, my husband being ill as well and owing so much money made me feel depressed and felt hopeless. I thought I will be put to prison for having debts bearing in mind, this is the first time that I have been in debt but it was not the case. My adviser told me that my creditors can't put me in jail as they won't get any of their money back. I was so naïve and so scared. I don't know so much about debt. Anyway with great determination to pay off my debts I started having plans on how to do it. I made a budget for myself and I did stick with it until I paid all my debts. Relief at last when I paid off my last debt last year. It was great feeling knowing I don't have to worry about debt after that.

Ways I took to repay my debts

When you are in debt, you don't know where to go for help. But as I found out, there are a lot of places where you can get help like the Citizens Advice Bureau here in England. Luckily there is one nearby in my hometown.There are a lot of online websites that give free advice on how to manage debts. Be careful not to go for the ones that ask you money for their advice. My husband can't help me as he was ill himself at the time. Also, I am the kind of person who tries to solve her own problems without relying too much on others for help, so I thought. But my debts have piled up and I can no longer manage it on my own so I really needed some expert's help. One advice online that I remember was to go to a Citizens Advice Bureau and ask for help from there. So that's what I did. I was too embarrassed at first to ask for help but as I was in deep trouble at the time I had to be brave. I was desperate for help and I needed someone to point me in the right direction. Thanks to CAB and Martin Lewis(money saving expert) I found a way to repay my debts. I owe it to myself for staying strong at the time.

Here are 10 ways I did to deal with my debts:

1. I went to a Citizens Advice Bureau and was advised that a male volunteer was going to help me.

2. Made an appointment, got all my paper work and had a meeting with the Volunteer (retired accountant) who worked out all my debts. I nearly died when he said I owe a lot of money. I knew I owe a lot but have no idea how much altogether. Then he called all my creditors on my behalf and negotiated with each of my creditors to freeze all the interests and late payment charges on all my credit cards and loans while I was still looking for a job. It was near Christmas time when I was jobless, that's why it is not easy to get a job straight away. With my Volunteer's help, my creditors were willing to freeze the interest and even stopped the late payment charges on my accounts. Not all of them did, one of the banks was not happy with my offer so he got a charging order on our property which is now paid off.

3. New Year came, new beginning for me. I got a job, notified my Volunteer Adviser and we had another meeting. The Volunteer advised me that when I get paid, we will work out how much I can afford to repay each of my creditor. He showed me how to work it out. He advised me to pay all my priority debts first then my creditors second. He advised me that whatever is left from paying my bills like mortgage, food, shoes and clothing, bus fares to work, and council tax, we offer it to each of my creditors.

4. When I got paid, my Volunteer Adviser showed me how to work out my budget. So I started to offer some money to my creditors by now. I was a little relieved that I was doing something about my debts. I was beginning to get back my lost confidence by now which is good and it made me feel alive again and more determined to pay off my debts.

5. I did every over time they offer at work, thinking of my debt repayments. By this time, I was focused on repaying my debts.

6. I took on extra cleaning and caring jobs that I can do in my days off to earn more money to repay my debts. I also applied for a better paying job and was lucky to have got it.

7. I did not go on holidays for a few years, I used my holidays to earn money to repay my debts.

8. I cut down on my personal expenses like clothes, shoes and unnecessary expenses. I even cut my own hair to save money for my repayments. I made my own sandwiches for work. I grow my own vegetables so I don't have to buy them.

9. I also took good care of myself not to get ill again because when you are in debt, it is really hard not to get depressed at some point. I can't afford to be off sick but some days the debts get you down.

10. After working solid a few years, all my debts have been paid off, thanks to my own efforts and thanks to the guidance and help of the kind Volunteer Accountant from the Citizens Advice Bureau.

Two kinds of loans to watch out for

Secured Loans and unsecured loans are two kinds of loans that I thought I knew what they were but my knowledge was incorrect or the advise given to me by the loan lenders were misleading.

Here's the difference between Secured loan and Unsecured loan:

Secured Loan - is a homeowner's loan that the lenders will secure to your property so that if you default, they will repossess or sell your house or flat to get the repayments for your loan. They want to ensure that if you cannot repay your loan, they got security. According to Martin Lewis(Money Saving Expert) you can borrow an amount from £5000 to£125,000 but it will be secured to your house or property.

Unsecured Personal Loan - according to Martin Lewis(Money Saving Expert) you can borrow up to £15,000. This is the kind of loan that I had but for some reason the lenders were able to attach a charging order to our joint property. When I was borrowing the money from the bank, I was advised that it won't affect our property but little did I know, I was being taken to court by the bank that lent me the money when I was in financial difficulty and yet they say that banks are sympathetic to their customers when they are in trouble. Don't believe it. When I was ill and lost my job, that's the time that the bank took advantage and took me to court. Although, I wrote to them and explained the situation, it had fallen on deaf ears.

My adviser(Volunteer) did reassure me that it is okay for them to secure my debt to my share of our property so that if I default on my payments again, then they can take their money when we sell our house which we have no intention of doing so at the time. The charging order will only be applied to my share of the property. I did think of going bankrupt but it is not fair on my husband. Anyway, the credit cards and loans including the charging order are now settled. It took me a few years to repay them all but it is done and dusted now. I am debt free now and it feels so good. Thanks to my own efforts and the help of the Volunteer Adviser at the Citizens Advice Bureau who pointed me in the right direction. Since then, I learnt a lot about debt. From now on I will be saving instead of borrowing. If I don't have money, I just have to go without.

Some useful tips when you are in debt

1. Admit that you are in debt. Ask for help, do not do it alone. You need someone to point you in the right direction. Contact your lenders, communicate with them as soon as possible. Do not delay. Time is important.

2. Ask your husband/wife, partner, or trusted friend to help you. Do not hesitate to ask, the earlier you deal with your debt, the better.

3. Search online for help. Lots of websites that give good advice about debts. I like Martin Lewis money saving expert website. This is a good one to read. Go to library and borrow books and magazines about personal finance. I learnt a lot about debts by reading books and magazines and reading articles online.

4. Try to eat healthy foods to keep yourself in good health. It is not easy to think about your health but believe me, you need to be strong and fit to deal with debt.

5. Have a goal and a plan to finish paying your debt sooner rather than later to save on interests and charges. It can be done I know. I have been there.

References

Martin Lewis money saving expert website - is the one I referred to a lot when I was in debt.This is a very good website to refer to. Martin Lewis have so many useful tips and advise about money. I even got some money back from my creditors by following Martin's advice on his website. It is the unfair charges and over limit fees that the creditors had been adding to my credit account. I got some of them back, thanks to Martin Lewis.

Prima Magazines - has a " Very Personal Finance" page where they give advice about money. I like this magazine but they are very expensive to buy.

I wrote this article to share my personal experience hoping to help others not to lose hope when they are in debt. When you are in debt whatever the reason for it, don't panic, you will find a way to get out of it. It is not easy but with proper help, you will know how to get out of debt.

Comments

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Author

Linda Bryen 2 years agofrom United Kingdom

Thank you, billybuc for your kind comment again. You are right if we need it we buy it but if we just want it we don't buy.

Bill Holland 2 years agofrom Olympia, WA

Very good information, and information that quite a few people need to read and learn. We climbed out of debt as well and have stayed out of it by being frugal and intelligent about our spending choices. Our mantra now is "need vs want." If we don't need it then chances are we won't be buying it.

Author

Linda Bryen 2 years agofrom United Kingdom

I have been through debts in the past and now I want to save instead. Thanks for your comment. Hope it helps you. Credit cards are okay only for emergency.

Ireno Alcala 2 years agofrom Bicol, Philippines

Thanks for the tips, kabayan. It really enlightened me to evade the lure of credit cards.

Author

Linda Bryen 2 years agofrom United Kingdom

Hope it helps you Peachpurple. Thank you once again for visiting my hubs.

peachy 2 years agofrom Home Sweet Home

thanks for the tips, bookmark this page for guide every month

Author

Linda Bryen 3 years agofrom United Kingdom

Thank you travmaj, once again for your kind comment. I have been thinking whether to publish it or not but this year, I did it. Hope it helps others who are in debt like me in the past

travmaj 3 years agofrom australia

liesl - you document this very well. It's not difficult to find oneself in debt but another story getting out of it. I'm impressed by your honesty in such a situation, and this makes the hub so real. Many of us can learn from this. Thank you. Best - Maureen